BRADENTON, Fla. - Miami Beach will begin preliminary negotiations with a group led by France-based Alstom to build a modern light rail streetcar line in the famed South Beach district.
The city plans to use a public-private partnership to construct, finance and operate the bidirectional SoBe loop, which is the first phase of a light-rail plan that will eventually expand from the beach to mainland Miami.
Miami Beach received three proposals from teams interested in developing the rail project.
The City Commission approved negotiating with the top-ranked Alstom-led Greater Miami Tramlink Partners on Wednesday. The team has indicated that it will finance the project with bonds and equity.
"This project aims to substantially ease traffic congestion, link key points of interest, connect people with jobs and opportunities, reduce air pollution and greenhouse gas emissions, and save thousands of dollars in commuting and parking costs for residents and visitors," said city manager Jimmy Morales.
Morales will lead negotiations on the project, currently estimated to cost about $380 million, although city officials said the final amount will be determined when the 35-year P3 concession agreement is finalized.
The streetcar will operate wirelessly in double-tracked, dedicated rights of way along 3.5 miles of city streets near sidewalks.
The project calls for a full "turn-key" contract that will also require the concessionaire to raise the elevation of the streets it will use as part of Miami Beach's ongoing resiliency program.
The city, well known for its flooding problems, is in the midst of raising streets and hardening stormwater and utility systems.
While the public's portion of the streetcar's cost has not been determined, the city is reviewing multiple sources of funding such as its resort tax, parking revenues, and tax increment financing as well as contributions from the Miami Beach Redevelopment Agency, Miami-Dade County, and the state.
Tramlink's most recent proposal was not immediately available.
Last year, Tramlink sent the city an unsolicited proposal, which said that a combination of debt and equity would finance the project.
The preliminary plan of finance said that a private activity bond allocation likely would be sought for long-term financing and that bank debt could be used for short-term or gap financing.
Some 80% of the equity would come from the independent global investment firm InfraRed Capital Partners Limited through its InfraRed Infrastructure Fund III, which had secured $1.2 billion of commitments from investors at the time the June 2015 proposal was submitted.
InfraRed closed last year on the 16-mile Portsmouth Bypass Project in Columbus, Ohio, a divided four-lane limited-access highway project into which it invested $550 million in equity.
Other investors in the Miami Beach streetcar consortium are Walsh Investors LLC with 15% of the equity and Alstom with a 5% contribution.
Walsh, a private company, is a 33% equity member of the project team building the Ohio River Bridges East End Crossing bridge, Indiana's first P3 project.
Other Greater Miami Tramlink partners are Alstom Transportation Inc., ArcherWestern Contractors LLC, Jacobs Engineering Group Inc., and Serco Inc.
If Miami Beach does not reach an accord with Tramlink, Morales will enter negotiations with the second-ranked team, Connect Miami Beach. Its main partners are OHL, Globalvia, and COMSA.
Miami Beach Mobility Partners was ranked third on the city's list. Its team consists of SACYR, John Laing, and AECOM.
The second and third-ranked proposers formally protested the rankings. The City Commission rejected the protests, but the firms could contest the decision in court.
